* Retail sales drop for first time in 8 months
* Consumer sentiment tops estimate
* National Semi results lift chipmakers
* Dow off 0.4 pct, S&P 500 off 0.2 pct, Nasdaq up 0.3 pct
* For up-to-the-minute market news see []
(Updates to late afternoon, changes byline)
By Rodrigo Campos
NEW YORK, June 11 (Reuters) - U.S. stocks mostly fell on
Friday, tracking an unexpected decline in retail sales that
raised concerns about the health of consumers, a key component
of the economic recovery.
Consumer-related shares were the hardest hit, with Home
Depot <HD.N> down 2.4 percent at $31.93, and Procter & Gamble
<PG.N>, down 1.9 percent at $60.72, weighing down the Dow
industrials. The S&P retail index <.RLX> dropped 1.1 percent.
Total retail sales marked their first monthly drop in
eight months, falling 1.2 percent in May -- contrary to
economists' consensus forecast for a gain of 0.2 percent.
Consumer spending accounts for roughly two-thirds of U.S.
economic activity.
"There's an idea that there's a slowdown taking place in
the U.S. economy, and data like this is helping that idea gain
traction," said John Brady, senior vice president of MF Global
in Chicago.
The Dow Jones industrial average <> dropped 36.58
points, or 0.36 percent, to 10,135.95. The Standard & Poor's
500 Index <.SPX> fell 2.48 points, or 0.23 percent, to
1,084.36. But the Nasdaq Composite Index <> gained 7.45
points, or 0.34 percent, to 2,226.16.
Weakness in the building materials component of retail
sales pushed the Morgan Stanley housing index <.HGX> down 0.7
percent. Shares of Hovnanian Enterprises Inc <HOV.N> fell 5.3
percent to $4.63.
In contrast to the weak retail sales, consumer sentiment
improved more than expected, rising to its strongest point in
over two years in June, according to a preliminary reading for
the month from the Thomson Reuters/University of Michigan
Surveys of Consumers. For details, see []
Also on the economic front, U.S. business inventories rose
0.4 percent to a 10-month high, slightly under the expectation
for a 0.5 percent increase. []
The Nasdaq rose on strength in semiconductor stocks a day
after National Semiconductor Corp <NSM.N> forecast margins and
revenues above estimates, signaling that demand is bouncing
back. []
National Semi shares rose 4.9 percent to $14.19 while
Altera Corp <ALTR.O> gained 2.5 percent to $24.25. The PHLX
Semiconductor index <.SOXX> added 0.9 percent.
In another bullish sign, the S&P 500 held technical
support around the 1,077 level that marks its 14-day simple
moving average. The benchmark S&P index is on track for its
first back-to-back close above its 14-day SMA in more than two
weeks.
And the Dow was on track to post its first weekly gain in
the last four.
Big-cap pharmaceutical companies' shares also advanced
after Barclays Capital upgraded the sector to "positive" from
"neutral," citing the revenue potential of new products.
[]
Pfizer Inc <PFE.N> was the Dow's top percentage gainer,
rising 3.4 percent to $15.41.
U.S.-listed shares of BP Plc <BP.N> climbed 3.6 percent to
$33.95 as UK officials made supportive comments, even as
scientists doubled estimates of the Gulf of Mexico's oil
spill. [] and []
(Reporting by Rodrigo Campos; Additional reporting by Ryan
Vlastelica; Editing by Jan Paschal)
